The United States Supreme Court has rejected New Zealand-based internet mogul Kim Dotcom's challenge to the US government's bid to seize assets held by him and others involved in the now-defunct website Megaupload.

The justices left in place a lower court's ruling that the US government could seize up to $40 million in assets held outside the United States as part of a civil forfeiture action being pursued in parallel with criminal charges for alleged copyright violations and money laundering.

Dotcom and several other defendants have contested US attempts to extradite them from New Zealand.

German-born entrepreneur Dotcom is wanted by US law enforcement authorities on copyright and money-laundering allegations related to Megaupload, which was shut down in 2012 following an FBI-ordered raid on his Auckland mansion. He was indicted the same year along with fellow Megaupload executives.

US authorities say Dotcom and his colleagues cost film studios and record companies more than $500 million and generated more than $175 million in profits by encouraging paying users to store and share copyright material including movies and TV shows.

The US government sought up to $175 million in assets, but the defendants say the assets in question, including two houses, luxury cars, and bank accounts, are worth only around $40 million.

A New Zealand court ruled in February that Dotcom and three other New Zealand-based defendants -- Finn Batato, Mathias Ortmann, and Bram van der Kolk -- could be extradited to the US to face the charges.

Two other indicted Megaupload associates, Sven Echternach and Julius Bencko, who live in Germany and Slovakia, respectively, have not been arrested, according to court filings.

The defendants contested the US government's forfeiture claims, saying in part that it could not seize property under the jurisdiction of a foreign court.

The US government's legal argument, adopted by the appeals court, is that the defendants are fugitives seeking to avoid criminal prosecution in the US and therefore are not allowed to contest the forfeiture.

Taking to Twitter, Dotcom said the decision would make extraditions become more difficult for the US.

"The US Supreme Court has just rendered International treaties with the US meaningless," he said. "US Supreme Court: 'If you use your treaty rights to oppose extradition say good bye to your assets, Mr. Fugitive'.

"Fortunately most of my assets are in Hong Kong and HK courts won't allow forfeiture of my assets simply because I legally oppose extradition."

The company strenuously denied the claims by Dotcom, labelling them defamatory.

In the 2014 New Zealand election, the Internet Party established by Dotcom failed to gain a seat, and party's Mana Party partner lost its only seat in Parliament.

Following the election failure, Dotcom announced plans in October 2015 for an alternative internet dubbed Meganet, which he said would be safe, secure, built on blockchain, and impenetrable by anyone, even government bodies.

He also touted the return of Megaupload on the fifth anniversary of the FBI raid, January 20, 2017. Dotcom said former users of the site would get their accounts reinstated with premium privileges, and hinted that the new website will use bitcoins.

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